Tag Archive | "futures trading"

Cutting the Risk with Automated Futures Trading

What Is Automated Futures Trading?

automated futures trading

Automated futures trading brings automated or algorithmic trading together with the futures market. The futures market deals in commodities, such as crude oil, corn or copper. Investors buy and sell stocks, based on predicted market prices. For the manufacturers and retailers, futures investments act as an advance on the money they will soon make, giving them the financial freedom to run their business properly. Investors can make huge returns, based on the difference between the predicted price and the actual value of the commodity.

Like all types of algorithmic trading, automated futures trading uses a computer program to make the big decisions. Because futures deal with sales and growth that has not happened yet, it can be a risky type of investment for those who do not understand the market. Automated computer programs use special algorithms to analyze the market. A good program will not only tell an investor where and when to invest, but will actually make the decisions. It will identify specifics such as price, timing and the exact number of stocks that should be bought or sold. As an increasing number of investors are using these programs to help them make their decisions, however, it is becoming more important to make sure that you have the best program available.

Where Can You Get the Best Automated Futures Trading Program?

There are a number of computer programs available that specialize in automated futures trading, but it can be difficult to find out which one is best. It is usually a good idea to find one that is specifically tailored to the futures market. While algorithms have been developed to follow the stock market in general, the futures market has its own patterns and its own risks. An algorithm designed to assess these will always be more accurate than a general automated trading program. It is also important that you do some research to make sure that a program is reliable. Find reviews online and check each company out with the Better Business Bureau to make sure that there have been no complaints. With a bit of care and research, you should have no problem finding a great automated futures trading program.

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Against the Wind with Future Trading Strategies

Placing Your Bet with Future Trading Strategies

future trading strategies

In many ways, there are only two possible future trading strategies. An investor can ride along with the pack as it flows in a specific direction, or he can swim

upstream against the torrent of the common wisdom of the moment. Naturally, these two strategies depend a lot on the quality of information available to the trader.

Using future trading strategies to bet against a developing trend requires that you know something that others may not yet realize. It can also involve investing on a visceral level, as in playing a hunch, or going with one’s gut feeling despite the apparent pattern. In any of these cases, however, the idea is to recognize a turn in the market before anyone else does. Gigantic profits can be made by contrarian moves in the face of mass psychology movements. This is not to say that losses cannot also be incurred. After all, the masses may simply be jumping on board a moving train, which still has a ways to go until it reaches its destination.

The Key that Unlocks Future Trading Strategies

It is important to realize that much of the moves on the futures market are triggered by macroeconomic data. News of a freeze in Brazil can immediately affect the coffee futures, while simultaneous news of a bumper crop in Colombia could go unnoticed at the same time. One needs real-time access to both the splashy news of disaster, as well as the plodding press releases of simple production figures. This wide-angle view of price sensitive information needs to be firmly married to narrowly focused technical analysis in order to achieve maximum contrarian profitability.

The same news can have either a great effect or almost none at all, depending on where the futures market stands at any given point in time.  News of a civil insurrection might be shrugged off in a bull market, but it could trigger a precipitate panic at times when the market is touching on overbought or oversold conditions. Future trading strategies usually require that you choose your indicators wisely, and always back up your pure hunches with short plays as insurance.


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Benefit From Learning Futures Trading Basics

A basic introduction to futures trading basics

Futures trading basics

Like all investment activities, futures trading involves speculation. As the term implies, futures traders gamble on future commodity prices. Fund raising is the fundamental objective of stock exchanges. By contrast, risk transference is the motivation for futures transactions.

Futures buying entails executing a formal commitment to purchase goods for a fixed price at some subsequent time. Most futures buyers never assume actual possession of any products, however. Futures trades are purely pecuniary.

Anatomy of a futures transaction

On August 23, 2011, Novice Investor buys a contract for 5,000 bushels of Russet potatoes at $2.00 per bushel. Delivery is scheduled for September 30. Investor liquidates his position on September 15 by reselling the contract for $2.25 per bushel.

Thus, Investor’s gross profit is 25 cents per bushel – a total gain of $1,250.00 for 23 days of ownership.

The long and short of futures trading basics

Futures positions may be either “long” or “short.” These terms respectively denote buying or selling contracts. Long positions profit only if a commodity’s price increases during the holding period. Commodity distributors often buy futures to hedge against rising prices. Investors initiate such trades to profit from anticipated price increases. Short positions profit only if commodity prices ultimately decrease.

Standard conventions

Futures contracts feature standardized terms designed to custom-fit the needs of market participants. Quality, quantity, and delivery data are preset. Price is the only negotiable term and is established via organized exchange venues. Such standardization allows futures contracts to be traded just like liquid financial instruments.

Futures trading requires nerves of steel and is not for the feint of heart. Highest trading volume often originates from investors with preexisting connections to particular commodities. Produce distributors or petroleum product suppliers that take long positions are apt illustrations of futures trading basics



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Making the Most of Options Futures Trading

Big Returns with Options Futures Trading

Options futures trading

If you are interested in getting big returns with options futures trading, it is important that you understand how options futures work. Like all options stock, options futures are derivatives. An option represents the agreement between two parties to make a transaction at a later, specified, date. Like all futures, options futures deal in the predicted value of a given stock. A smart futures investor agrees to buy stocks that are expected to increase in value in the near future. The stock’s price is based on the stock’s predicted value. Because of the risk involved in predicting a future price, however, the investor pays less for futures stock than they would for regular stock. When the predicted growth occurs, the value of the stock increases. Investors earn even higher returns when the growth is larger than predicted.

Options Futures Trading: How Do You Know Which Options to Buy?

In options futures trading, an option to buy is referred to as a call and an option to sell is referred to as a let. Understanding which calls and lets to take can be tricky, especially if you are an inexperienced investor. There are, however, a number of places you can turn to for help. The internet is becoming an increasingly popular source of trading advice. Investors have begun creating communities on online forums. The members of these forums discuss their investment strategies and can often offer useful tips and tricks for first time investors.

The internet is also home to a number of guides, blogs and tip sheets related to options futures trading. Some of these are sponsored by the companies whose stocks they endorse, and cannot be trusted. Others, however, offer useful, unbiased advice. It is also possible to by an automated investing program over the internet.  Automated investing software can track market patterns and can understand how they affect your portfolio. They can keep you up to date on trends and prices, and will not only tell you when to take a call or let, but how many stocks you should buy or sell. While many investors have succeeded at options futures trading without help, some experienced advice or an automated program may greatly increase your returns.

Futures trader info and more about Energy Futures Trading!

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Get Bigger Returns with Futures Trading Signals

What Are Futures Trading Signals?

futures trading signals

If you are an avid investor in the futures market, you are probably familiar with futures trading signals. While the old investment standby of Buy Low, Sell High, always applies, however, if often seems as if each investor has their own system and follows their own set of signals. If you are an economic expert, it is reasonable to believe that your system is the most accurate, unless you have had years of economic schooling. However, professional assistance can put you ahead of the game. This can be particularly beneficial when dealing with futures, as the entire exchange is based on predictions of future movement in the market

Where Should You Get Futures Trading Signals?

Traditionally, those looking for investment advice have hired a financial adviser. Many professionals have undergone the years of economic schooling that you have not, and can offer advice on everything from which stocks to buy, to which markets to stay away from, to futures trading signals. Although a good financial adviser can be expensive, their advice is often a worthy investment. The fees you pay may be minimal in comparison to your increased returns on the futures market.

Modern technology has offered a number of new, less expensive options, however, for getting futures trading signals. There are an increasing number of online forums and websites that offer advice at no cost. These cannot only tell you when it is time to buy or sell, but can help you learn the signals for yourself. There is also an array of automated computer programs that give advice and manage your investments. These programs use special algorithms to track the futures market and can even send futures trading signals to your phone or email when it is time to buy or sell.

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Looking For Futures Trading Firms

The Excitement of Using Futures Trading Firms

futures trading firms

Futures trading firms provide a portal to online futures trading activity. These companies help independent and institutional web traders access the exciting world of futures trading online. Trading futures differs from regular trading in stocks and commodities because futures are financial instruments that legally bind the purchaser to pay a certain amount for a set number of goods at a specific date in the future. The potential for profits exists in the possible change in the price of the goods between the time of purchase and the time of delivery.

Options at Futures Trading Firms

When you choose from the numerous futures trading firms on the web, review the kinds of options and abilities you have in accessing the futures markets through them. Hopefully they give you a choice of software platform so that you are not restricted to one type of software with one firm while you need a distinct software platform with another company. They should offer service for both mini and large contracts. Lower necessary amounts for intraday margins make it easier for independent investors to participate.

The hours of business are crucial, since you may need weekend or evening hours to do your trading. Each firm will have a different arrangement of hours available. Some futures trading firms also offer the possibility of trading stocks, commodities and other options so that you do not have to log out and go somewhere else if you plan on working on your investments with these other instruments during the day.

Some futures trading firms provide more data than others do. It will be easier to make a profit with a firm that maintains a useful database that is frequently updated. Futures are, by nature, prone to change and to thrive on these investments investors need constantly updated information. Good futures trading firms will have all of these choices and information.

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